Secondary metabolite genes are often clustered together and situated in particular genomic regions like the subtelomere that can facilitate niche adaptation in fungi. Solanapyrones are toxic secondary metabolites produced by fungi occupying different ecological niches. Full genome sequencing of the ascomycete Ascochyta rabiei revealed a solanapyrone biosynthesis gene cluster embedded in an AT-rich region proximal to a telomere end and surrounded by Tc1/Mariner-type transposable elements. The highly AT-rich environment of the solanapyrone cluster is likely the product of repeat-induced point mutations. Several secondary metabolism-related genes are found in the flanking regions of the solanapyrone cluster. Although the solanapyrone cluster appears to be resistant to repeat-induced point mutations, a P450 monooxygenase gene adjacent to the cluster has been degraded by such mutations. Among the six solanapyrone cluster genes (sol1-sol6), sol4 encodes a novel type of Zn(II)2Cys6 zinc cluster transcription factor. Deletion of sol4 resulted in complete loss of solanapyrone production, but did not compromise growth, sporulation or virulence. Gene expression studies with the sol4-deletion and sol4-overexpression mutants delimited the boundaries of the solanapyrone gene cluster and revealed that sol4 is likely a specific regulator for solanapyrone biosynthesis, and appears to be necessary and sufficient for induction of the solanapyrone cluster genes. Despite the dynamic surrounding genomic regions, the solanapyrone gene cluster has maintained its integrity, suggesting important roles of solanapyrones in fungal biology.